interim report - timeless · interim report 2015 condensed consolidated statement of financial...

for the six months ended30 September 2015

(incorpoooroorrrrated in Hong gggg KKKKKKong with limited liability)(incorpooor ed in Hongteatrr g (Stock Code: 8028)

Interim Report

Characteristics of TheGrowth Enterprise Market (“GEM”)of The Stock Exchange ofHong Kong Limited (the “Stock Exchange”)

GEM has been positioned as a market designed to accommodate companies to which a higher investment risk may be attached than other companies listed on the Stock Exchange. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration. The greater risk profile and other characteristics of GEM mean that it is a market more suited to professional and other sophisticated investors.

Given the emerging nature of companies listed on GEM, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the Main Board of the Stock Exchange and no assurance is given that there will be a liquid market in the securities traded on GEM.

Hong Kong Exchanges and Clearing Limited and the Stock Exchange take no responsibility for the contents of this report, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this report.

This report, for which the directors (the “Directors” or individually a “Director”) of TIMELESS SOFTWARE LIMITED (the “Company”) col lectively and individual ly accept ful l responsibi l i ty, includes particulars given in compliance with the Rules Governing the Listing of Securities on the GEM of the Stock Exchange (the “GEM Listing Rules”) for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this report is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this report misleading.

This report shall remain on the “Latest Company Announcements” page of the GEM website at www.hkgem.com for at least seven days from the date of its publication and on the Company’s website at www.timeless.com.hk

Condensed Consolidated Statement of Comprehensive IncomeFor the three months and six months ended 30 September 2015

01

Timeless Software Ltd.

(Unaudited)

Three months ended Six months ended

30 September 30 September

2015 2014 2015 2014

Notes HK$’000 HK$’000 HK$’000 HK$’000

Turnover 2 85,767 35,378 110,884 57,642

Other income and gains 39 1,237 212 1,431

Purchase and production costs (42,798) (26,479) (52,054) (42,795)

Staff costs (6,029) (7,235) (12,583) (14,148)

Depreciation and amortisation (4,754) (935) (11,009) (1,932)

Other expenses (15,500) (8,429) (19,782) (11,098)

Net gains/(losses) on investments

held for trading (233) 224 (233) 226

Gain on disposal of subsidiaries 15 225 – 225 –

Finance costs (276) (510) (585) (1,803)

Share of losses of associates (31) (35) (91) (54)

Profit/(loss) before tax 16,410 (6,784) 14,984 (12,531)

Income tax expense 3 (5,992) (405) (8,614) (941)

Profit/(loss) for the period 10,418 (7,189) 6,370 (13,472)

Other comprehensive income/(loss),

net of income tax

Items that may be reclassified

subsequently to profit or loss:

Exchange differences on translating

foreign operations (8,385) 3,453 (8,385) 4,193

Reclassification adjustment on

exchange differences released

upon disposal of subsidiaries (4,565) (14) (4,565) (14)

Share of other comprehensive income/

(loss) of associates (1,850) 1,274 2,235 747

Other comprehensive income/(loss) for

the period, net of income tax (14,800) 4,713 (10,715) 4,926

Total comprehensive loss

for the period (4,382) (2,476) (4,345) (8,546)

02

Interim Report 2015

Condensed Consolidated Statement of Comprehensive Income (Continued)

For the three months and six months ended 30 September 2015

(Unaudited)

Three months ended Six months ended

30 September 30 September

2015 2014 2015 2014

Notes HK$’000 HK$’000 HK$’000 HK$’000

Profit/(loss) attributable to:

Owners of the Company (2,163) (5,808) (7,556) (12,115)

Non-controlling interests 12,581 (1,381) 13,926 (1,357)

10,418 (7,189) 6,370 (13,472)

Total comprehensive income/(loss)

attributable to:

Owners of the Company (10,903) (3,659) (12,211) (10,306)

Non-controlling interests 6,521 1,183 7,866 1,760

(4,382) (2,476) (4,345) (8,546)

HK cents HK cents HK cents HK cents

Loss per share

– Basic and diluted 5 (0.11) (0.36) (0.38) (0.74)

Condensed Consolidated Statement of Financial PositionAt 30 September 2015

03


(Unaudited) (Audited)

30 September 31 March

2015 2015

Notes HK$’000 HK$’000

Non-current assets

Property, plant and equipment 6 68,512 70,978

Other intangible assets 6 228,642 244,162

Interests in associates 8,698 6,717

Prepaid lease payments 6,758 7,019

Deposits 24,983 25,608

Land rehabilitation costs 5,617 6,158

343,210 360,642

Current assets

Inventories 41,388 45,157

Prepaid lease payments 181 185

Trade and other receivables 7 44,608 18,601

Investments held for trading 1,746 –

Bank balances and cash 57,781 51,037

145,704 114,980

Current liabilities

Trade and other payables 8 36,515 21,523

Amount due to a related company 16 700 700

Dividends payable to non-controlling

interests 10,614 20,557

Bank borrowing 9 8,891 9,192

Promissory note 10 10,707 11,169

Current tax liabilities 7,371 2,368

74,798 65,509

Net current assets 70,906 49,471

Total assets less current liabilities 414,116 410,113

04

Interim Report 2015

Condensed Consolidated Statement of Financial Position (Continued)

At 30 September 2015



2015 2015

Notes HK$’000 HK$’000

Non-current liabilities

Promissory note 10 19,643 29,904

Provision for land rehabilitation 9,626 9,866

Deferred tax liabilities 11 31,880 33,782

61,149 73,552

Net assets 352,967 336,561

Capital and reserves

Share capital 12 827,785 806,049

Reserves (733,718) (720,008)

Equity attributable to owners of the Company 94,067 86,041

Non-controlling interests 258,900 250,520

Total equity 352,967 336,561

Condensed Consolidated Statement of Changes in EquityFor the six months ended 30 September 2015

05


(Unaudited)

Share capital

Share options reserve

Investment revaluation

reserveTranslation

reserveAccumulated

deficit

Attributable to owners

of the Company

Non-controlling

interests Total

HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

Balance at 1 April 2014 773,715 5,760 1,914 9,178 (704,549) 86,018 254,574 340,592

Loss for the period – – – – (12,115) (12,115) (1,357) (13,472)

Other comprehensive income for the period – – 660 1,149 – 1,809 3,117 4,926

Total comprehensive income/(loss) for the period – – 660 1,149 (12,115) (10,306) 1,760 (8,546)

Issue of ordinary shares under employee share option plan 1,817 (639) – – – 1,178 – 1,178

Transaction costs attributable to issue of new ordinary shares (9) – – – – (9) – (9)

Release of reserve upon lapse of share options – (169) – – 169 – – –

Release upon disposal of a subsidiary – – – – – – (770) (770)

Balance at 30 September 2014 775,523 4,952 2,574 10,327 (716,495) 76,881 255,564 332,445

Balance at 1 April 2015 806,049 4,110 2,612 10,850 (737,580) 86,041 250,520 336,561

Profit/(loss) for the period – – – – (7,556) (7,556) 13,926 6,370

Other comprehensive income/(loss) for the period – – 2,235 (6,890) – (4,655) (6,060) (10,715)

Total comprehensive income/(loss) for the period – – 2,235 (6,890) (7,556) (12,211) 7,866 (4,345)

Issue of ordinary shares under employee share option plan 4,070 (1,499) – – – 2,571 – 2,571

Issue of ordinary shares by way of placing 18,125 – – – – 18,125 – 18,125

Transaction costs attributable to issue of new ordinary shares (459) – – – – (459) – (459)

Release of reserve upon lapse of share options – (441) – – 441 – – –

Capital injection by non-controlling interests – – – – – – 1,249 1,249

Release upon disposal of subsidiaries – – – – – – (735) (735)

Balance at 30 September 2015 827,785 2,170 4,847 3,960 (744,695) 94,067 258,900 352,967

Condensed Consolidated Statement of Cash FlowsFor the six months ended 30 September 2015

06

Interim Report 2015

(Unaudited)

Six months ended 30 September

2015 2014

HK$’000 HK$’000

Net cash generated by/(used in) operating activities 16,435 (8,220)

Cash flows from investing activities

– Acquisition of property, plant and equipment (4,115) (4,181)

– Additions to exploration rights and assets (5,260) (86)

– Other investing cash flows (1,538) 6,165

Net cash (used in)/generated by investing activities (10,913) 1,898

Cash flows from financing activities

– Net proceeds from issue of equity shares 20,236 1,169

– Repayment of promissory note (11,207) (1,941)

– Dividend paid to non-controlling interests (9,943) –

– Other financing cash flows 2,984 (2,098)

Net cash generated by/(used in) financing activities 2,070 (2,870)

Net increase/(decrease) in cash and cash

equivalents 7,592 (9,192)

Cash and cash equivalents at the beginning of

period 50,913 33,583

Effect of foreign exchange rate changes (849) 398

Cash and cash equivalents at the end of period 57,656 24,789

Analysis of the balances of cash and

cash equivalents

Bank balances and cash 57,781 24,913

Time deposit with original maturity of three months or

more and pledge bank deposits (125) (124)

57,656 24,789

Notes to the Condensed Consolidated Financial StatementsFor the three months and six months ended 30 September 2015

07


1. Basis of Preparation and Accounting Policies

These condensed consolidated interim financial statements have not been audited and were approved for issue by the Board of the Company on 12 November 2015.

This condensed consolidated interim financial information has been prepared in accordance with the Hong Kong Accounting Standard (“HKAS”) 34 “Interim Financial Reporting” issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”) as well as with the applicable disclosure requirements of Chapter 18 of the Rules Governing the Listing of Securities on the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited (the “GEM Listing Rules”).

The accounting policies and method of computation used in the preparation of these results are consistent with those used in annual financial statements for the year ended 31 March 2015, which have been prepared in accordance with Hong Kong Financial Reporting Standards (“HKFRSs”). The condensed consolidated interim financial information should be read in conjunction with the annual financial statements for the year ended 31 March 2015. The Group has adopted new or revised standards, amendments to standards and interpretations of HKFRSs which are effective for accounting periods commencing on or after 1 April 2015. The adoption of such new or revised standards, amendments to standards and interpretations does not have material impact on the condensed consolidated financial statements and does not result in substantial changes to the Group’s accounting policies.

In addition, the preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

In the preparation of these condensed consolidated interim financial statements, the significant judgements made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the annual financial statements for the year ended 31 March 2015.

The financial information relating to the year ended 31 March 2015 included in these financial statements as comparative information does not constitute the Company’s statutory annual consolidated financial statements for that financial year but is derived from those financial statements. Further information relating to these statutory financial statements required to be disclosed in accordance with section 436 of the Hong Kong Companies Ordinance (Cap. 622) is as follows:

The Company has delivered the financial statements for the year ended 31 March 2015 to the Registrar of Companies in accordance with section 662(3) of, and Part 3 of Schedule 6 to, the Companies Ordinance (Cap. 622).

The Company’s auditor has reported on the financial statements for the year ended 31 March 2015. The auditor’s report was unqualified; did not include a reference to any matter to which the auditor drew attention by way of emphasis without qualifying its report; and did not contain a statement under section 406(2), 407(2) or (3) of the Companies Ordinance (Cap. 622).

08

Interim Report 2015

Notes to the Condensed Consolidated Financial Statements (Continued)


2. Segment Information

Revenue represents the amounts received and receivable from computer hardware and

software business and mining business in the People’s Republic of China (the “PRC”) during

the six-month period and is analysed as follows:

Segment revenues and results

The following is an analysis of the Group’s revenue and results by reportable segments:

(Unaudited)


2015 2014

HK$’000 HK$’000

Segment revenue

Computer hardware and software business 3,280 10,325

Mining business 107,604 47,317

110,884 57,642

Segment results

Computer hardware and software business (10,004) (9,402)

Mining business 27,182 (1,770)

17,178 (11,172)

Interest income 208 131

Other income and gains 4 1,300

Unallocated corporate expenses (1,722) (1,159)

Net gains/(losses) on investments held for trading (233) 226

Gain on disposal of subsidiaries 225 –

Finance costs (585) (1,803)

Share of losses of associates (91) (54)

Profit/(loss) before tax 14,984 (12,531)

Segment revenue reported above represents revenue generated from external customers.

There were no inter-segment sales in the current period (2014: nil).

Segment results represent the profit/(loss) from each segment without allocation of interest

income, other income and gains, unallocated corporate expenses, net gains/(losses) on

investments held for trading, gain on disposal of subsidiaries, finance costs and share of

losses of associates. This is the measure reported to the chief operating decision maker for

the purposes of resource allocation and assessment of segment performance.

09




2. Segment Information (Continued)

Segment assets and liabilities

The following is an analysis of the Group’s assets and liabilities by reportable segments:



2015 2015

HK$’000 HK$’000

Segment assets

Computer hardware and software business 26,105 31,558


Total segment assets 420,689 416,063

Unallocated 68,225 59,559

Consolidated assets 488,914 475,622

Segment liabilities

Computer hardware and software business 680 5,176


Total segment liabilities 96,055 88,796

Unallocated 39,892 50,265

Consolidated liabilities 135,947 139,061

For the purposes of monitoring segment performances and allocating resources between

segments:

• all assets are allocated to reportable segments other than interests in associates,

investments held for trading and bank balances and cash; and

• all liabilities are allocated to reportable segments other than bank borrowing and

promissory note.

10

Interim Report 2015



3. Income Tax Expense

(Unaudited)

Three months ended 30 September


2015 2014 2015 2014

HK$’000 HK$’000 HK$’000 HK$’000

Current taxPRC Enterprise Income Tax 6,970 802 9,692 1,461

Deferred tax (note 11) (978) (397) (1,078) (520)

Total income tax charged in profit or loss 5,992 405 8,614 941

Hong Kong profits tax is calculated at the rate of 16.5% (2014: 16.5%) of the estimated assessable profit. No provision for Hong Kong profits tax has been made as the Group had no assessable profit arising in or derived from Hong Kong for both periods.

PRC subsidiaries are subject to PRC Enterprise Income Tax at 25% (2014: 25%). Taxation arising in other jurisdictions is calculated at the rates prevailing in the relevant jurisdictions.

4. Interim Dividend

The directors do not recommend the payment of an interim dividend for the period (for the six months ended 30 September 2014: nil).

5. Loss Per Share

The calculation of the basic and diluted loss per share is based on the following data:

(Unaudited)

Three months ended 30 September


2015 2014 2015 2014

Loss:Loss for the period attributable to owners of the

Company for the purpose of basic and diluted loss per share HK$2,163,000 HK$5,808,000 HK$7,556,000 HK$12,115,000

Number of ordinary shares:Weighted average number of ordinary shares for the

purpose of basic and diluted loss per share 1,985,732,264 1,630,655,851 1,974,062,814 1,626,297,952

The computation of diluted loss per share did not assume the exercise of the Company’s outstanding share options during the three months and six months ended 30 September 2015 and 2014 since their exercise would result in decrease in loss per share.

11




6. Property, Plant and Equipment and Other Intangible Assets

During the current interim period, the Group purchased property, plant and equipment with

a cost of approximately HK$4,115,000 (for the six months ended 30 September 2014:

approximately HK$4,181,000) and other intangible assets with a cost of approximately

HK$5,260,000 (for the six months ended 30 September 2014: approximately HK$86,000).

During the current interim period, depreciation for property, plant and equipment was

approximately HK$3,701,000 (for the six months ended 30 September 2014: approximately

HK$2,578,000) and amortisation for other intangible assets was approximately

HK$14,828,000 (for the six months ended 30 September 2014: HK$7,973,000). Amongst

the above, approximately HK$7,520,000 was included in the cost of inventories (for the six

months ended 30 September 2014: approximately HK$9,118,000). The remaining expenses

were charged to the condensed consolidated statement of comprehensive income.

7. Trade and Other Receivables

At 30 September 2015, included in the Group’s trade and other receivables are

trade receivables of approximately HK$32,997,000 (31 March 2015: approximately

HK$6,663,000).

The credit terms granted to customers are varied and are generally the result of negotiations

between individual customers and the Group. No interest is charged on overdue trade

receivables. The management closely monitors the credit quality of trade and other

receivables and considers the trade and other receivables that are neither past due nor

impaired to be of a good credit quality.

The following is an analysis of trade receivables by age, presented based on the invoice date

and net of allowance for doubtful debts:



2015 2015

HK$’000 HK$’000

0 to 30 days 25,798 4,288

31 to 60 days 7,181 710

61 to 90 days 18 –

More than 90 days – 1,665

32,997 6,663

At 31 March 2015, included in the Group’s other receivables are non-interest bearing

amount due from an associate and interest-bearing loan to an associate amounting to

approximately HK$431,000 and HK$1,374,000 respectively. The loan carries interest at the

best-lending rate of similar maturity of banks in PRC. These amounts are unsecured and

disposed together with the disposal of subsidiaries during current period.

12

Interim Report 2015



8. Trade and Other Payables

At 30 September 2015, included in the Group’s trade and other payables are trade payables

of approximately HK$57,000 (31 March 2015: approximately HK$2,625,000).

The following is an aged analysis of trade payables presented based on the invoice date:



2015 2015

HK$’000 HK$’000

0 to 30 days 57 1,481

31 to 60 days – –

61 to 90 days – –

More than 90 days – 1,144

57 2,625

9. Bank Borrowing

The bank borrowing is secured by the Group’s property, plant and equipment and bear

interest at 3% per annum below the HK$ best lending rate. The effective interest rate is

2.25% per annum. The bank borrowing shall be repayable by monthly instalments, of which

approximately HK$614,000 (31 March 2015: approximately HK$607,000) shall be repayable

within one year, HK$2,597,000 (31 March 2015: approximately HK$2,568,000) shall be

repayable within two to five years and HK$5,680,000 (31 March 2015: approximately

HK$6,017,000) shall be repayable over five years. The bank borrowing contains a repayable

on demand clause and is classified as current liabilities in the condensed consolidated

statement of financial position.

10. Promissory Note

On 11 May 2012, the Group issued a promissory note to Starmax Holdings Limited as part

of the purchase consideration of a 51% equity interest in Goffers Management Limited in the

principal amount of HK$63,000,000 (the “Promissory Note”), of which HK$33,000,000 was

repaid. The Promissory Note bears interest at 3% per annum and is repayable in three equal

instalments payable on each anniversary date of issue. It is secured by a charge over a 51%

of the issued share capital of Goffers Management Limited, a non-wholly owned subsidiary

of the Company.

Imputed interest expenses of approximately HK$258,000 (for the three months ended 30

September 2014: approximately HK$456,000) and HK$483,000 (for the six months ended

30 September 2014: approximately HK$1,694,000) respectively have been recognised in

the condensed consolidated statement of comprehensive income for the three months and

six months ended 30 September 2015.

13




11. Deferred Tax Liabilities

Deferred tax credit of approximately HK$978,000 (for the three months ended 30 September

2014: deferred tax credit of approximately HK$397,000) and HK$1,078,000 (for the six

months ended 30 September 2014: approximately HK$520,000) have been recognised in

the condensed consolidated statement of comprehensive income for the three months and

six months ended 30 September 2015 in income tax expense respectively (note 3).

12. Share Capital

Number of Shares Share Capital

HK$’000

Issued and fully paid:

At 1 April 2015 1,846,291,503 806,049

Issue of ordinary shares by way of placing (note a) 125,000,000 18,125

Issue of ordinary shares upon exercise of share

options (note b) 18,610,000 4,070

Transaction costs attributable to issue of new

ordinary shares – (459)

At 30 September 2015 1,989,901,503 827,785

Notes:

a. On 2 April 2015, an aggregate of 125,000,000 ordinary shares were issued to not less than six placees, who are independent third parties, at a price of HK$0.145 per share. The net proceeds were used to provide additional working capital of the Group. Details of the placement are set out in the Company’s announcements dated 30 March 2015 and 9 April 2015.

b. Share options were exercised by option holders during the six months ended 30 September 2015 to subscribe for a total of 18,610,000 (2014: 10,400,000) ordinary shares for which approximately HK$4,070,000 (2014: HK$1,817,000) has been credited to share capital, representing HK$2,571,000 subscription money received and HK$1,499,000 transferred from share options reserve.

14

Interim Report 2015



13. Fair Value Measurements of Financial Instruments

The fair values of financial instruments traded in active markets are determined with

reference to quoted market bid prices.

The directors consider that the carrying amount of the Promissory Note approximated to its

fair value as at 30 September 2015. The carrying amount of the Promissory Note as at 31

March 2015 amounted to approximately HK$41,073,000, whereas its fair value amounted to

approximately HK$42,035,000. The fair value of the Promissory Note has been arrived using

the effective interest method by discounting future estimated repayments at discount rate

of 2.99% (31 March 2015: 3.63%) with reference to the Hong Kong Exchange Fund Notes

yields and credit spreads of comparable financial instruments with similar characteristics.

Fair value hierarchy

Level 1 Level 2 Level 3 Total

HK$’000 HK$’000 HK$’000 HK$’000

As at 30 September 2015Financial assets:Investments held for trading 1,746 – – 1,746

Financial liabilities:Promissory Note – 30,350 – 30,350

As at 31 March 2015Financial liabilities:Promissory Note – 42,035 – 42,035

During the six months ended 30 September 2015, there were no transfer between Level 1

and Level 2, or transfer into or out of Level 3 (for the six months ended 30 September 2014:

nil).

14. Share-Based Payment Arrangement

On 25 September 2013, an ordinary resolution approving the adoption of a new share option

scheme was passed by shareholders at the annual general meeting of the Company (“2013

Share Option Scheme”). Under the 2013 Share Option Scheme, directors of the Company

may grant options to eligible persons to subscribe for the Company’s shares subject to the

terms and conditions as stipulated therein. Unless otherwise cancelled or amended, the

2013 Share Option Scheme will remain valid for a period of 10 years from the adoption date.

During the six months ended 30 September 2015, no share option was granted to

employees (for the six months ended 30 September 2014: nil).

15




15. Disposal of Subsidiaries

On 31 July 2015, the Group disposed of the entire equity interest of Timeless China Limited,

a wholly-owned subsidiary of the Company, and its subsidiaries to Keyhard Software

Limited, a company beneficially owned by an employee of a subsidiary of the Company

(the “Disposal”) at a cash consideration of HK$7,500,000, of which HK$3,750,000 was

received. The balance will be paid on or before 31 January 2016. The Group recorded a

gain of approximately HK$225,000 for the Disposal. Details of the Disposal are set out in the

Company’s announcement dated 31 July 2015.

Analysis of assets and liabilities over which control was lost

HK$’000

Property, plant and equipment 1,712

Inventory 82

Trade and other receivables 14,037

Bank balances and cash 1,612

Trade and other payables (4,867)

Net assets disposed of 12,576

Gain on disposal

HK$’000

Consideration 7,500

Net assets disposed of (12,576)

Non-controlling interests 735

Cumulative exchange difference in respect of the net assets of

the subsidiaries reclassified from equity to profit or loss 4,566

225

Net cash inflow arising on disposal

HK$’000

Consideration received in cash and cash equivalents 3,750

Less: cash and cash equivalents disposed of (1,612)

2,138

16

Interim Report 2015



16. Related Party Transactions

The balances with related parties are set out on the condensed consolidated statement of

financial position.

Save as disclosed elsewhere in these condensed consolidated interim financial statements,

the Group had the following significant related party transactions during the interim period:

(Unaudited)


2015 2014

HK$’000 HK$’000

Interest expenses paid to a related company (note a) 483 1,694

Service income from a related company (note b) – 274

Notes:

a. Effective interest expenses on Promissory Note is charged at 2.99% (2014: 2.99%) per annum and payable to a related company which is beneficially owned as to 90.01% by Mr. Felipe Tan, a director and shareholder of the Company, at terms mutually agreed by both parties. Further details of the Promissory Note are set out in note 10.

b. Service income in respect of the provision of trading platform design and building services were received from a related company which is beneficially owned as to 30.02% by Mr. Felipe Tan, a director and shareholder of the Company, at normal commercial terms mutually agreed by both parties.

Compensation of key management personnel

The key management personnel are the directors of the Company. Details of their

remuneration during the current interim period are set out as follows:

(Unaudited)


2015 2014

HK$’000 HK$’000

Short-term employee benefits 2,452 3,121

Post-employment benefits 45 56

2,497 3,177

Management Discussion and Analysis

17


About the Group

The Group is principally engaged in two business lines, namely (i) the provision of computer

consultancy and software maintenance services, software development, sales of computer

hardware and software and e-Commerce services (hereinafter collectively referred to as the

“Software Business”); and (ii) the exploration and exploitation of mines (hereinafter collectively

referred to as the “Mining Business”).

Business Review and Outlook

Software Business

In order to streamline its businesses and to reallocate the financial resources to its core business

segments in Hong Kong, the Group sold its software business in the PRC by disposing of the

entire equity interest of Timeless China Limited, a wholly owned subsidiary of the Company,

and its subsidiaries on 31 July 2015. The Group recorded a gain on disposal of approximately

HK$225,000. After the disposal, the Group will focus on its software business in Hong Kong.

On the rise of FinTech – Financial Technology, the Group will base on our solid foundation on

mobile technology and cloud technology to provide financial solutions and services. We are

also working with different partners to provide enterprise scale unified communication solutions

with integrated enterprise messaging, email, cloud storage, intelligent search and process

management. For our long term strategy on elderly service, we will expand our elderly cloud

service – EcCare (established since 2005) from NGO to private sector.

Mining Business

Review

The Mining Business mainly includes the exploration and exploitation of mines and the processing

and sale of outputs from the mines in the PRC. For the six months ended 30 September 2015,

gold dores and nickel-copper ores were the products sold under the Mining Business.

The global economy and markets were still full of uncertainty and remains directionless during

the period under review. Although the gold price for the six months ended 30 September 2015

was relatively stable when compared with the gold price of last quarter, it was still in a downward

trend and decreased by approximately 9.9% as compared to the corresponding period of last

year. The sales of gold dores, which were adversely affected by the relatively low gold price, were

approximately 73kg for the six months ended 30 September 2015 (2014: approximately 145

kg gold dores), representing a decrease of 49.7% as compared to the corresponding period of

2014.

The nickel price has also dropped by approximately 19.2% from US$12,458 per tonne as at 31

March 2015 to US$10,068 per tonne as at 30 September 2015. The Group sold nickel-copper

ores of approximately 32,045 tonnes for the six months ended 30 September 2015 from the trial

production of the Baishiquan Nickel-copper Mine commenced in late 2014. There was no sale of

nickel-copper ores for the six months ended 30 September 2014.

18

Interim Report 2015

Management Discussion and Analysis (Continued)

Business Review and Outlook (Continued)

Mining Business (Continued)

Exploration, Development and Mining Production Activities

The exploration, development and mining production activities of the project of the Group for the

six months ended 30 September 2015 are summarised below:

Activity

Mine Exploration Development Mining

Heishiliang Gold

Mine

No exploration and development activity

Mineral resource and reserve estimates (as per the independent technical report prepared

in November 2011) fully exhausted.

Hongshannan Gold

Mine

No material exploration No material development Ores extracted:

14,670 tonnes

Tuchushan Iron Mine No activity during the period under review

Baishiquan Nickel-copper

Mine

Completed 51 surface

drill holes for a total of

approximately 14,200 meters

Completed shaft construction

of approximately 330 meters

and drift construction of

approximately 850 meters

Ores extracted during

development:

52,333 tonnes

South Hami Gold Project No material exploration No material development Commercial production

not yet commenced

Processing Activity

For the six months ended 30 September 2015, the total quantity of gold ores extracted from the

mines and processed by the processing plant were approximately 14,670 tonnes and 36,732

tonnes respectively. Both the gold ores extracted and processed decreased by 17.4% and 3.5%

respectively as compared to the corresponding period of last year. The decrease in gold ores

extracted was because only Hongshannan Gold Mine was in production in the current period

while there were ores extracted from Heishiliang Gold Mine and South Hami Gold Project last

year.

For the six months ended 30 September 2015, we have nickel-copper ores extracted during

development of 52,333 tonnes. Since the nickel-copper mine development began in late

September 2014, the 16,328 tonnes extracted in the corresponding period of last year is not

comparable.

19





Expenditure Incurred

During the six months ended 30 September 2015, the Group has incurred expenditure of approximately HK$63.1 million on exploration, development, mining and processing activities, details of which are set out below:

Hongshannan Gold Mine

Baishiquan Nickel-copper

Mine Total

HK$’000 HK$’000 HK$’000

1. Capital Expenditure1.1 Exploration activities Drilling and analysis – 5,392 5,392

Subtotal – 5,392 5,392

1.2 Development activities (including mine construction)

Addition of intangible assets, property, plant and equipment 232 2,109 2,341

Construction of tunnels and sub-contracting charges – 10,696 10,696

Staff cost – – –

Subtotal 232 12,805 13,037

Total Capital Expenditure 232 18,197 18,429

2. Operating Expenditures for Mining Activities

Staff cost 320 846 1,166 Consumables 37 68 105 Fuel, electricity, water and other services 740 1,150 1,890 Non-income taxes, royalties and other

government charges 388 668 1,056 Sub-contracting charges 11,575 4,596 16,171 Transportation 1,160 – 1,160 Depreciation and amortization 5,895 10,853 16,748 Others 111 229 340

Total Operating Expenditure 20,226 18,410 38,636

Total Capital and Operating Expenditure 20,458 36,607 57,065

20

Interim Report 2015


HK$’000

3. Processing Expenditure

Staff cost 1,947

Consumables 2,209

Fuel, electricity, water and other services 1,047

Depreciation and amortization 537

Transportation 170

Others 157

Total Processing Expenditures 6,067

Total Expenditures 63,132

Infrastructure Projects, Subcontracting Arrangements and Purchase of Equipment

New contracts and commitments entered into during the six months ended 30 September 2015

by the Group were summarised as follows:

Infrastructure

projects

Subcontracting

arrangements

Purchase of

equipment and

consumables Total

HK$’000 HK$’000 HK$’000 HK$’000

Baishiquan Nickel-copper Mine 515 3,026 – 3,541

Processing Plant – – 231 231

Total 515 3,026 231 3,772



Expenditure Incurred (Continued)

21





Promissory Note

On 11 May 2012, the Group issued Promissory Note to Starmax Holdings Limited as part of the

purchase consideration of a 51% equity interest in Goffers Management Limited. The outstanding

balance of HK$30,000,000 is repayable in three equal instalments on each anniversary date of

issue from now onward. The Promissory Note bears interest at 3% per annum payable on each

anniversary date of issue and is secured by a charge over a 51% of the issued share capital of

Goffers Management Limited, a non-wholly owned subsidiary of the Company.

Outlook

The gold market price fluctuated around US$1,150 per ounce from April to September this year,

with a five-year low of US$1,072.30 per ounce on 20 July 2015. The nickel market price was also

on a declining curve, decreasing to US$10,065 per tonne on 30 September 2015. The smart

money has left the resources sector since 2011, leaving the whole commodities market to supply

and demand. With the slowdown of the global economy, the commodities market is facing a

painful period. Facing supply cutback situation and until the market found its balance, the value of

the metals will continue to search for its bottom. The management is working from various angles

to cut expenditures and is looking for opportunities of picking up quality resources. Same as our

gold mining, the nickel-copper mine will also suspend its production during the winter period and

will resume in early March of next year.

Financial Performance Review

For the six months ended 30 September 2015, the Group recorded turnover of approximately

HK$110,884,000, representing an increase of 92.4% against the corresponding period in 2014.

Profit for the period under review was approximately HK$6,370,000, as compared to the loss

of approximately HK$13,472,000 over the same period in 2014. Effective interest expense of

the Promissory Note was approximately HK$483,000, representing the majority of finance costs

incurred for the six months ended 30 September 2015, as compared with HK$1,694,000 in the

corresponding period in 2014.

In respect of the Software Business segment, the Group recorded turnover of approximately

HK$3,280,000 (2014: approximately HK$10,325,000), representing a decrease of 68.2% as

compared with the corresponding period in 2014. The segmental loss was approximately

HK$10,004,000 (2014: approximately HK$9,402,000), representing an increase of 6.4% as

compared with the corresponding period of last year.

22

Interim Report 2015


Financial Performance Review (Continued)

For the period under review, the Mining Business segment posted turnover of approximately

HK$107,604,000 (2014: approximately HK$47,317,000), and segmental profit of approximately

HK$27,182,000 (2014: segmental loss of approximately HK$1,770,000) respectively, representing

an increase by 1.3 times and 16.4 times respectively as compared with the corresponding period

in 2014.

Loss attributable to owners of the Company was approximately HK$7,556,000, as compared to

approximately HK$12,115,000 over the same period in 2014.

Capital Structure, Liquidity and Financial Resources

As at 30 September 2015, the Group had bank balances and cash amounted to approximately

HK$57,781,000 (31 March 2015: approximately HK$51,037,000) and net current assets of

approximately HK$70,906,000 (31 March 2015: approximately HK$49,471,000). Out of the

Group’s bank balances and cash, about 24% and 75% (31 March 2015: 13% and 85%) were

denominated in Hong Kong dollars and Chinese Renminbi respectively. As at 30 September

2015, the Group’s current ratio was 1.95 (31 March 2015: 1.76).

The Group generally financed its operations and investing activities primarily with internally

generated cash flow, bank borrowing as well as the proceeds from fund raising activities.

As at 30 September 2015, the Group had outstanding borrowings of approximately

HK$39,241,000 (31 March 2015: HK$50,265,000), which primarily represents the Promissory

Note accounted for at amortised cost using the effective interest method. As at the date of

this report, the Promissory Note shall be repaid by instalments with accrued interests and

approximately HK$10,902,000 (31 March 2015: approximately HK$11,207,000) was repayable

within one year and HK$20,900,000 (31 March 2015: approximately HK$31,802,000) was

repayable within two to five years accordingly.

The Board believes that the Group has an adequate capital and the Group’s existing financial

resources are sufficient to fulfill its commitments and working capital requirements.

23



Gearing Ratio

As at 30 September 2015, the Group’s gearing ratio was approximately 41.72% (31 March

2015: 58.42%), based on total borrowings of approximately HK$39,241,000 (31 March

2015: approximately HK$50,265,000) and equity attributable to owners of the Company of

approximately HK$94,067,000 (31 March 2015: approximately HK$86,041,000). The decrease in

the gearing ratio was mainly due to the repayment of HK$10 million Promissory Note during the

six months ended 30 September 2015.

Charge on the Group’s Assets

As at 30 September 2015, 102 shares of Goffers Management Limited (representing 51% of its

total issued share capital), an indirect wholly-owned subsidiary of the Company, was pledged

to the noteholder in order to secure the payment obligations of the Group under the Promissory

Note.

The Group had also pledged bank deposits and property, plant and equipment with carrying

amounts of approximately HK$125,000 and HK$19,385,000 respectively to secure certain credit

and loan facilities granted to the Group.

Order Book and Prospects for New Business

There was no order book on hand as at 30 September 2015.

Significant Investments, Material Acquisitions and Disposals of Subsidiaries and Affiliated Companies

During the period under review, the Group disposed of the entire equity interest in Timeless China

Limited at a cash consideration of HK$7,500,000. Further details of the disposal are set out in

note 15 to this report.

Save as above, there was no material disposal or acquisition of subsidiaries and affiliated

companies for the period under review.

Segmental Information

The Group is currently organised into two operating segments – (i) the Software Business; and (ii)

the Mining Business. During the period under review, revenue generated by the Group’s Software

Business and Mining Business accounted for 2.96% (2014: 17.91%) and 97.04% (2014: 82.09%)

respectively.

24

Interim Report 2015


Future Plans for Material Investments

The Group does not have any plan for material investments in the near future.

Exposure to Exchange Risks

The Group is not exposed to significant foreign currency risk as majority of its transactions are

denominated in the respective functional currencies of the Group’s major operating subsidiaries

(i.e. Hong Kong dollars and Renminbi).

Contingent Liabilities

As at 30 September 2015, there were no material contingent liabilities incurred by the Group.

Employee Information

As at 30 September 2015, the Group employed a total staff of 139. Staff remuneration is

reviewed by the Group from time to time and increases are granted normally annually or by

special adjustment depending on length of service and performance when warranted. In addition

to salaries, the Group provides staff benefits including medical insurance and provident fund.

Share options and bonuses are also available to employees of the Group at the discretion of the

directors and depending upon the financial performance of the Group.

Other Information

25


Directors’ and Chief Executive’s Interests and Short Positions in Shares and Underlying Shares of the Company

At 30 September 2015, the interests and short positions of the directors and the chief executive

of the Company and their associates in the shares, underlying shares or debentures of the

Company and its associated corporations, as recorded in the register maintained by the

Company pursuant to Section 352 of the Securities and Futures Ordinance (“SFO”), or otherwise

notified to the Company and the Stock Exchange pursuant to Rule 5.46 of the GEM Listing Rules,

were as follows:

Long positions

(a) Interests in the shares of the Company

Number of ordinary shares

held in the capacity of

Name of directors

Beneficial

owner

Controlled

corporation

Total number

of shares

Percentage of

shareholding

Executive Directors

Cheng Kin Kwan 123,800,000 – 123,800,000 6.22%

Felipe Tan 111,090,000 404,912,000* 516,002,000 25.93%

Zhang Ming 75,500,000 – 75,500,000 3.79%

Independent Non-Executive Directors

Chan Choi Ling 1,000,000 – 1,000,000 0.05%

Chan Mei Ying, Spencer 1,500,000 – 1,500,000 0.08%

Lam Kwai Yan 1,000,000 – 1,000,000 0.05%

* The shares were held by a private company which is owned as to 90.01% by Mr. Felipe Tan.

26

Interim Report 2015

Other Information (Continued)

Directors’ and Chief Executive’s Interests and Short Positions in Shares and Underlying Shares of the Company (Continued)

Long positions (Continued)

(b) Interests in shares of associated corporation of the Company

Name of

director

Name of

associated corporation Capacity

Number of

shares/

registered

capital

Percentage of

interest in the

registered capital

of the associated

corporation

Felipe Tan Goffers Management Limited Interest of controlled corporation 200* 100%

Goffers Resources Limited Interest of controlled corporation 1,000 100%

Kangshun HK Limited Interest of controlled corporation 1,000 100%

Kangshun Investments Limited Interest of controlled corporation 1,000 100%

Xinjiang Tianmu Mineral Resources

Development Co. Ltd.

Interest of controlled corporation RMB36,000,000 51%

* 98 shares (representing 49%) are held by Mr. Felipe Tan through Starmax Holdings Limited whereas 102 shares (representing 51%) are pledged to Starmax Holdings Limited as security of the payment obligations of the Group under the Promissory Note.

(c) Interests in debentures of associated corporation of the Company

Name of director

Name of

associated corporation Capacity

Amount of

debentures

Felipe Tan Time Kingdom Limited Interest of controlled corporation HK$30,000,000*

* The outstanding balance of the Promissory Note issued to Starmax Holdings Limited which is owned as to 90.01% by Mr. Felipe Tan.

27





(d) Options to subscribe for ordinary shares of the Company

Particulars of the directors’ interests in share options to subscribe for shares in the Company

pursuant to the Company’s 2003 and 2013 Share Option Scheme were as follows:

Number of share options and number of underlying shares

Name of

directors

Date of

grant Exercisable period

Exercise

price

per share

Outstanding

at

01.04.2015

Granted

during

the period

Exercised

during

the period

Lapsed

during

the period

Outstanding

at

30.09.2015

HK$

2003 share option scheme


Chan Mei Ying,

Spencer

24.3.2006 24.3.2006-23.3.2016 0.1530 500,000 – (500,000) – –

Tsang Wai Chun,

Marianna

24.3.2006 24.3.2006-23.3.2016 0.1530 500,000 – – – 500,000

26.9.2006 26.9.2006-25.9.2016 0.0772 1,500,000 – (1,500,000) – –

2,500,000 – (2,000,000) – 500,000

28

Interim Report 2015


Number of share options and number of underlying shares

Name of

directors

Date of


Exercise

price

per share

Outstanding

at

01.04.2015

Granted

during

the period

Exercised

during

the period

Lapsed

during

the period

Outstanding

at

30.09.2015

HK$

2013 share option scheme

Executive Directors

Lau Yun Fong

Carman

3.10.2013 3.10.2013-2.10.2023 0.1490 2,000,000 – – – 2,000,000

17.2.2014 17.2.2014-16.2.2024 0.1380 400,000 – – – 400,000

Zhang Ming 3.10.2013 3.10.2013-2.10.2023 0.1490 3,000,000 – – – 3,000,000


Chan Choi Ling 3.10.2013 3.10.2013-2.10.2023 0.1490 1,000,000 – (1,000,000) – –

Chan Mei Ying,

Spencer

3.10.2013 3.10.2013-2.10.2023 0.1490 1,000,000 – (1,000,000) – –

Lam Kwai Yan 3.10.2013 3.10.2013-2.10.2023 0.1490 1,000,000 – (1,000,000) – –

8,400,000 – (3,000,000) – 5,400,000

Save as disclosed above and other than nominee shares in certain wholly-owned

subsidiaries held by certain directors in trust for the Group, at 30 September 2015, none

of the directors or chief executive or any of their respective associates had any interests

or short positions in the shares, underlying shares or debentures of the Company or its

associated corporations which fall to be notified to the Company and the Stock Exchange

pursuant to Part XV of the SFO, or which were required, pursuant to Section 352 of the

SFO, to be entered in the register referred to therein or which were required to be notified to

the Company and the Stock Exchange pursuant to Rule 5.46 of the GEM Listing Rules.



(d) Options to subscribe for ordinary shares of the Company (Continued)

29



Substantial Shareholders’ Interests and Short Positions in Shares and Underlying Shares

As at 30 September 2015, the register maintained by the Company pursuant to Section 336 of

the SFO shows that other than the interests disclosed above in respect of certain directors and

the chief executive, the following shareholders had notified the Company of relevant interest in the

issued share capital of the Company.

Name of substantial shareholders

Number of

ordinary shares

held

Number of

share options

and

underlying

shares held

Aggregate

long position

Percentage of

the issued

share capital

Educational Information Technology (HK)

Company Limited (note 1) 108,057,374 – 108,057,374 5.43%

Starmax Holdings Limited (note 2) 404,912,000 – 404,912,000 20.35%

Notes:

(1) These shares were held in trust for 寧夏教育信息技術股份有限公司 (Ningxia Educational Information Technology Company Limited), a company which is owned as to 25.04% by the Group.

(2) Starmax Holdings Limited is beneficially owned as to 90.01% by Mr. Felipe Tan who also directly holds 111,090,000 shares.

Save as disclosed in the section “Directors’ and chief executive’s interests and short positions in

shares and underlying shares of the Company”, the Company has not been notified of any other

interests or short positions in the issued share capital as at 30 September 2015.

30

Interim Report 2015


Share Options

A summary of the share options granted under the 2003 Share Option Scheme are as follows:

Number of share options

Type of

participants

Date of


Exercise

price

per share

Outstanding

at

01.04.2015

Granted

during

the period

Exercised

during

the period

Lapsed

during

the period

Outstanding

at

30.09.2015

HK$

Directors 24.3.2006 24.3.2006-23.3.2016 0.1530 1,000,000 – (500,000) – 500,000

26.9.2006 26.9.2006-25.9.2016 0.0772 5,000,000 – (1,500,000) – –*

18.6.2007 18.6.2007-17.6.2017 0.2980 800,000 – – – –*

Employees 24.3.2006 24.3.2006-23.3.2016 0.1530 600,000 – (300,000) (300,000) –

26.9.2006 26.9.2006-25.9.2016 0.0772 – – – – 3,500,000*

18.6.2007 18.6.2007-17.6.2017 0.2980 2,000,000 – – (1,400,000) 1,400,000*

9.9.2011 9.9.2011-8.9.2021 0.1500 1,900,000 – (800,000) (300,000) 800,000

20.11.2012 20.11.2012-19.11.2022 0.1330 15,400,000 – (5,200,000) (200,000) 10,000,000

26,700,000 – (8,300,000) (2,200,000) 16,200,000

A summary of the share options granted under the 2013 Share Option Scheme are as follows:

Number of share options

Type of

participants

Date of


Exercise

price

per share

Outstanding

at

01.04.2015

Granted

during

the period

Exercised

during

the period

Lapsed

during

the period

Outstanding

at

30.09.2015

HK$

Directors 3.10.2013 3.10.2013-2.10.2023 0.1490 8,000,000 – (3,000,000) – 5,000,000

17.2.2014 17.2.2014-16.2.2024 0.1380 400,000 – – – 400,000

Employees 3.10.2013 3.10.2013-2.10.2023 0.1490 10,710,000 – (5,910,000) (600,000) 4,200,000

17.2.2014 17.2.2014-16.2.2024 0.1380 2,900,000 – (1,400,000) (800,000) 700,000

22,010,000 – (10,310,000) (1,400,000) 10,300,000

* The related director, who held 3,500,000 share options and 800,000 share options as at 1 April 2015, resigned as director of the Company with effect from 10 August 2015 but remains as an employee of the Group.

31



Competing Interest

Mr. Felipe Tan and Mr. Zhang Ming hold shareholdings and directorships in GobiMin Inc., the

shares of which are listed on the TSX Venture Exchange in Canada (stock code: GMN). Its

subsidiaries and associate companies are principally engaged in exploration of a gold mine and

prospecting exploration projects of gold, copper and nickel in Xinjiang, PRC. All of them are in

exploration or prospecting stage and are not yet in production, whereas the mining business

of the Group are in production stage. In this regard, Mr. Felipe Tan and Mr. Zhang Ming are

considered to have interests in businesses which might compete, either directly or indirectly with

the businesses of the Group.

The abovementioned competing businesses are operated and managed by companies within

independent management and administration. In addition, the Board is independent of the boards

of the abovementioned companies. Accordingly, the Group is therefore capable of carrying on

business independently of, and at arm’s length from the said competing business.

Purchase, Sale or Redemption of the Company’s Listed Securities

During the period under review, neither the Company nor any of its subsidiaries purchased, sold

or redeemed any of the Company’s listed securities.

Code on Corporate Governance Practices

The Company has complied throughout the six months ended 30 September 2015 with the code

provisions set out in the Corporate Governance Code contained in Appendix 15 to the GEM

listing Rules, except for (1) Mr. Cheng Kin Kwan holds the dual role of being the chairman and

the chief executive officer of the Company. The Board considers that this structure will not impair

the balance of power and authority between the Board and the management of the Company.

The Board also believes that Mr. Cheng’s appointment as both the chairman and chief executive

officer is beneficial to the business prospects of the Company, better facilitates the execution

of the Group’s business strategies and maximises effectiveness of its operations; (2) Ms. Tsang

Wai Chun Marianna and Mr. Chan Mei Ying Spencer have served as independent non-executive

directors of the Company for more than 9 years. Ms. Tsang and Mr. Chan have demonstrated

their abilities to provide independent view to the Company’s matters. Notwithstanding their years

of service as an independent non-executive director of the Company, the Board is of the view

that Ms. Tsang and Mr. Chan are able to continue to fulfill their roles as required and meet the

independence guidelines set out in Rule 5.09 of the GEM Listing Rules. Save as disclosed above,

the Company has met the code provisions set out in the Corporate Governance Code contained

in Appendix 15 to the GEM Listing Rules throughout the six months ended 30 September 2015.

Code of Conduct Regarding Securities Transactions by Directors

The Company has adopted a code of conduct regarding securities transactions by directors on

terms no less exacting than the required standard of dealings set out in Rules 5.48 to 5.67 of

the GEM Listing Rules. Having made specific enquiry of all directors, all directors confirmed that

they have complied with the required standard of dealings and the code of conduct regarding

securities transactions by directors adopted by the Company throughout the six months ended

30 September 2015.

32

Interim Report 2015


Updated Biographical Details of Directors

According to Rule 17.50A(1) of the GEM Listing Rules, the information of the following director

was updated:

Independent non-executive director

Ms. Tsang Wai Chun, Marianna, aged 61, is the Managing Director of TWC Management

Limited. She is also the independent non-executive director of Loco Hong Kong Holdings Limited

(Stock code: 8162), the shares of which is listed on the GEM. She is a member of the Institute

of Chartered Secretaries and Administrators, the Hong Kong Institute of Company Secretaries,

the Taxation Institute of Hong Kong, the Chartered Institute of Personnel and Development,

the Society of Registered Financial Planners, the Chartered Institute of Arbitrators, the Institute

of Financial Accountants and Institute of Public Accountants in Melbourne, Australia. She is

appointed as a member of the Board of Review (Inland Revenue Ordinance). Ms. Tsang has over

30 years of company secretarial, corporate affairs, and related legal working experience in major

commercial corporations and in professional firms. Ms. Tsang has an MBA and a postgraduate

certificate in Professional Accounting. She was appointed as an independent non-executive

director in October 2003.

Audit Committee

The audit committee comprises three independent non-executive directors, Ms. Tsang Wai Chun

Marianna, Mr. Chan Mei Ying Spencer and Mr. Lam Kwai Yan. The audit committee has reviewed

the unaudited interim financial results for the six months ended 30 September 2015.

On behalf of the Board

Cheng Kin Kwan

Chairman & Chief Executive Officer

Hong Kong, 12 November 2015

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